NZ dollar holds gains after business confidence

NZ dollar holds gains as business confidence, building permits underpin local growth story

By Paul McBeth

April 30 (BusinessDesk) - The New Zealand dollar held gains after a business confidence survey and building data didn't derail the prospects for the local economic recovery, and ahead of central bank meetings that will likely dictate global sentiment.

The kiwi traded at 85.59 US cents at 5pm in Wellington from 85.65 cents at 8am, up from 85.20 cents yesterday. The trade-weighted index advanced to 78.75 from 78.47.

New Zealand business confidence edged down last month, with a net 32 percent of firms expecting better conditions in the coming year, led by the construction sector, according to the ANZ Business Outlook.

Government figures showed a 9.1 percent fall in seasonally adjusted building permits in March due to a slump in the volatile apartments component, though Canterbury consents rose to a new record. Reserve Bank figures also showed credit growth accelerated in March.

The business confidence survey "shows everything going alright" while the "building permits were not as bad when you look behind the data," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney.

Traders are preparing for the Federal Open Market Committee and European Central Bank monetary policy reviews later this week, with the European decision seen as the bigger risk to market sentiment in increasing volatility.

"If volatility starts to pick up and we see bigger movements, the kiwi could pull back a little bit," Tennent-Brown said.

Investors will be looking at Euro-zone unemployment and inflation figures and private US payrolls ahead of the Federal Reserve meeting on Wednesday, and China manufacturing data tomorrow.

The kiwi rose to 65.35 euro cents from 65.27 cents and climbed to 55.26 British pence from 54.88 pence. It was little changed at 82.64 Australian cents from 82.61 cents and gained to 83.85 yen from 83.21 yen.

(BusinessDesk)

© Scoop Media